Core Advantages and Ecological Status of Cosmos

Recently, a blockchain industry expert wrote an article about "The Current Core Technologies and Ecological Projects of Cosmos," interpreting the core technological advantages of Cosmos, the innovative mechanisms on application chains, and several important projects currently on Cosmos.

The major challenge facing traditional blockchain today is the advancement of its widespread adoption and scalability. One of the dilemmas is the lack of interoperability between different chains, which makes communication and data transfer complex and inefficient. In addition, because the design focus has been on security rather than scalability, scalability has remained a primary issue, leading to slower communication speeds, increased network congestion, and consequently higher costs.

Cosmos proposes a solution to these challenges by introducing an interconnected blockchain paradigm. It utilizes the Inter-Blockchain Communication (IBC) protocol to achieve seamless communication and secure asset transfers between different chains. With a standardized framework for interchain interoperability, Cosmos facilitates efficient cross-chain interactions, expanding the possibilities and practicality of blockchain technology. Additionally, Cosmos addresses scalability issues through its modular architecture and consensus algorithms. Developers can use the Cosmos SDK to create application-specific blockchains, referred to as "zones." Zones can adopt different consensus mechanisms, allowing for horizontal scalability and performance optimization. By supporting parallel processing across multiple zones, Cosmos significantly enhances the network's transaction capacity and scalability, while also utilizing the Comet consensus algorithm to provide fast block confirmation times, increased security, and resistance against malicious attacks. This type of consensus algorithm serves as a reliable foundation for interconnected blockchain networks, combining efficiency, finality, and robustness.

Core: Cosmos SDK, IBC and Comet

The Cosmos SDK provides developers with the ability to create customized blockchains or zones that meet specific needs and goals. Utilizing the interoperability features of Cosmos, these customized zones extend the boundaries of inter-chain interactions. The Comet consensus algorithm enhances this capability, ensuring that the Cosmos network operates securely and efficiently. In addition, IBC supports seamless communication across different chains.

Cosmos Highlights

Interoperability: The advantage of Cosmos lies in its assurance of interoperability, allowing independent blockchains within the Cosmos network to connect easily. This interoperability facilitates breakthroughs in cross-chain applications and collaboration, driving innovation and enhancing the practicality of decentralization.

Scalability and Performance: Cosmos addresses scalability issues by allowing the creation of independent blockchains or zones through authorization. These zones can customize their consensus mechanisms and scalability based on user needs, supporting horizontal scaling by accommodating increased transaction volumes through the addition of extra zones. As a result, the Cosmos ecosystem boasts excellent performance and scalability.

Personal Sovereignty: The Cosmos ecosystem provides an ideal platform for creating chains focused on personal sovereignty. By leveraging the infrastructure provided by Cosmos, developers can flexibly customize any aspect of the technology stack to enhance performance, throughput, security, and other key factors of the chain. For example, EVM chains like Evmos are built using the existing technology stack. Additionally, dedicated application layers can be developed to support these specific virtual machines (VMs), enabling the construction of chains that run on different VMs, such as Move or SVM.

Developer-Friendly Environment: Cosmos provides a friendly environment for blockchain developers. The Cosmos SDK is a feature-rich platform for building dApps. By leveraging the SDK's modular framework, developers can create their own unique blockchains outside of the SDK, simplifying the development process. This streamlined approach allows developers to create custom chains that extend from the Cosmos SDK, thereby increasing the adoption and growth of the blockchain ecosystem.

Cosmos Application Chain

Application chains are an indispensable part of the Cosmos innovative ecosystem, representing specialized and specific application blockchains that meet different use cases. Unlike traditional monolithic blockchains, the modular approach adopted through the Cosmos SDK allows developers to customize consensus, storage, and networking mechanisms according to the specific requirements of their dApps. This grants application chains a certain degree of autonomy, enabling developers to better control their applications and enhance their ability to shape user experiences. Furthermore, the Cosmos application chain model offers attractive revenue opportunities, allowing dApp creators to explore unique monetization strategies and promote sustainable growth within their respective chains.

The flexibility of Cosmos application chains extends to the handling of MEV. By providing developers with tools to design MEV strategies tailored to their needs, Cosmos incentivizes fair and transparent MEV extraction, promoting a fairer and more efficient ecosystem. Additionally, the interconnectivity facilitated by the IBC protocol is a key advantage of the Cosmos application chain model. It supports seamless communication and asset transfers between different application chains, enabling the development of advanced cross-chain DeFi applications and expanding possibilities for developers and users alike. In summary, application chains in the Cosmos ecosystem offer a promising avenue for dApp development, providing sovereignty, revenue opportunities, flexibility in MEV, and seamless interoperability, thus nurturing a vibrant and thriving blockchain ecosystem.

Inter-chain security

Inter-chain security is a groundbreaking approach aimed at enhancing the security of new Cosmos chains and facilitating their smooth launch. It involves the concept of "renting" economic security from an already established security chain in the Cosmos ecosystem (Cosmos Hub).

Main Advantages

Economic Security Leasing: In order to launch a new Cosmos chain, developers can utilize the security of the Cosmos Hub or other secure chains by locking a certain amount of the new chain's native tokens as collateral. This process helps to establish financial connections between the new chain and the secure chain.

Cross-chain Security: Achieve economic security through inter-chain security. The new Cosmos chain has stronger resistance to attacks, as it can rely on a large number of different validators in the secure chain to protect its transactions and assets, reducing the risk of 51% attacks and other security threats.

Independent Blockchains: Each Cosmos chain operates independently, with its own governance, tokens, and use cases. However, through inter-chain communication protocols like IBC, they can securely exchange data and value, facilitating interoperability and synergy within the Cosmos ecosystem.

By adopting inter-chain security and cooperating within the Cosmos ecosystem, the new chain can significantly lower the entry barrier and gain a robust and proven security infrastructure. It promotes innovation, accelerates the development of blockchain, and brings about a new era of secure and interconnected dApps.

Cosmos SDK

The Cosmos SDK supports modularity, creating an ecosystem that includes a large number of interchangeable modules. This approach frees developers from the previous task of "building complex functionalities from scratch." Instead, developers can seamlessly integrate pre-built modules into their applications, simplifying the creation of application-specific blockchains. The Cosmos SDK offers high flexibility in module customization, allowing developers to tailor these modules precisely to their application needs, opening up a possible realm for fine-tuning chain applications. As the Cosmos Network evolves, the ecosystem of SDK modules will also develop, providing developers with scalable options and functionalities. In this dynamic environment, complex and highly specialized blockchain applications can be nurtured, fostering innovation and driving the development of the Cosmos ecosystem.

The Cosmos SDK also prioritizes security through its capability-based security concept. These features act as "guardians", clearly defining boundaries between modules and mitigating risks from malicious or unforeseen interactions. By protecting creation, the Cosmos SDK focuses on security measures.

Inter-Blockchain Communication Protocol IBC

IBC is a protocol within the Cosmos ecosystem designed to facilitate secure and decentralized communication across blockchains. It acts as a bridge to promote data transfer throughout the Cosmos network. By utilizing cryptographic proofs and consensus algorithms, IBC ensures the integrity and credibility of inter-chain transactions, maintains data confidentiality, and prevents tampering or unauthorized access. This protocol not only enhances the interoperability of chains but also fosters collaboration and innovation by allowing project-based systems to be leveraged across the network. With IBC, Cosmos has the potential to usher in a new era of blockchain connectivity, providing new possibilities for dApps, cross-chain asset transfers, and the creation of interconnected blockchain networks.

Tracking: Chain B continuously receives the data headers sent from Chain A, and vice versa. This allows each chain to track the validator set of the other chain, essentially running a light client of another chain.

Binding: When the IBC transfer is initiated, the token is bound.

Proof Relay: Then, 10 tokens are bound as proof relayed from chain A to chain B.

Verification: Verify the credentials against the data header of chain A on chain B. If the credentials are valid, create 10 credentials on chain B.

Cosmos Environment

The current Cosmos ecosystem is quite good, attracting a variety of projects and establishing influential partnerships. By leveraging Cosmos's powerful infrastructure, these projects have entered a highly interoperable blockchain space, potentially unleashing strong network effects. This seamless collaboration and integration greatly enhance the overall ecosystem, promote innovation, and drive the adoption of Cosmos as a popular blockchain solution.

Cosmos-based Projects

Osmosis

Osmosis is an innovative cryptocurrency project built on the Cosmos ecosystem, providing a DEX platform that facilitates liquidity supply. With the support of the IBC protocol, Osmosis enables seamless token swaps between different chains within the Cosmos network. This unique feature allows users to access a variety of assets and pools, promoting an efficient and secure trading experience. By leveraging Cosmos's interoperability and scalability, Osmosis has created an inclusive and interconnected ecosystem that enhances liquidity and enables cross-chain collaboration. With its focus on user-centricity and optimized liquidity management, Osmosis opens new opportunities for DeFi participants to explore a broader range of assets and unleash their trading potential.

dYdX

dYdX is a DEX platform that has gained popularity for its user-centric approach to crypto trading. By allowing users to fully control their private keys and assets, dYdX eliminates reliance on centralized entities, promoting a safer and more transparent trading experience. dYdX operates on the Cosmos chain, utilizing the Cosmos SDK to enable fast and efficient trading, as well as seamless interoperability with other Cosmos-based applications. In addition to basic crypto trading, dYdX also offers margin trading and lending services, catering to traders looking to leverage their positions and lending users hoping to earn interest on idle assets. With its strong security, Cosmos has great prospects on dYdX, fundamentally changing the way traders participate in cryptocurrencies while fostering the growth of the DeFi ecosystem.

Akash Network

Akash Network provides a decentralized cloud computing marketplace. By leveraging the security of Cosmos, Akash Network offers a secure platform where users can exchange data and develop applications. The network operates through a PoS consensus mechanism, enhancing the security of transactions. The native token of Akash Network is AKT, serving as the utility token of the ecosystem. Through integration with Cosmos, Akash Network benefits from the interoperability and scalability of a larger network, enabling seamless communication with other blockchain platforms. As a result, Akash Network allows developers and organizations to access affordable decentralized cloud computing resources.

Sei Network

Sei Network is a high-performance blockchain platform operating as an L1 on the Cosmos SDK blockchain platform, providing financial services and facilitating the deployment of the DeFi ecosystem. The network was founded by individuals who recognized the need for a decentralized financial system that prioritizes transaction speed and security while offering innovative financial tools to users. Sei utilizes its proprietary PoS consensus algorithm to provide secure transaction confirmations through staking and ownership verification. The platform's three-layer architecture includes a client layer, service layer, and chain platform layer, supporting high throughput of up to 20,000 transactions per second. With built-in support for smart contracts using Rust and Solidity programming languages, developers can easily build custom projects and DeFi applications on Sei. The network's native token SEI serves as an internal asset for rewards, staking, and project management, promoting a sustainable and prosperous ecosystem. Additionally, Sei's integration with Cosmos grants it interoperability and scalability, allowing for seamless communication with other blockchain platforms and facilitating broader adoption and easier access.